Breaking News

FCC Approves AOL/Time Warner Merger

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

STUART VARNEY, CNN ANCHOR: We do, indeed, have breaking news. Let's go right to Patty Davis at the FCC in Washington for what's happening -- Patty.

PATTY DAVIS, CNN CORRESPONDENT: CNN has learned that the Federal Communications Commission has, indeed, approved the AOL/Time Warner merger, but there are conditions attached. We'll hear exactly what those conditions are in just a few minutes at about 7:15 Eastern time.

William Kennard, the chairman of the Federal Communications Commission, expected here in the commission meeting room to make that announcement and say what those conditions are on that deal.

Now, this deal combines the nations largest Internet companies with one of the biggest entertainment companies. AOL will now own all of Time Warner's programming: HBO; CNN, of course, is owned by Time Warner; Warner Brothers; "TIME" Magazine; and, most importantly, access to Time Warner's high-speed cable lines. AOL is betting that those high-speed cable lines are the future of Internet service.

Now, the Federal Trade Commission, last night -- last month set its own conditions on this deal; it approved it. It forced the AOL and Time Warner combination to open access to its high-speed cable lines to other Internet service providers. Consumers could eventually see must faster Internet service, access to movies on the Web, much more sophisticated interactive television. The trick analysts say, though: Can these two companies pull off the combination and make this sophisticated technology work -- Stuart.

VARNEY: I heard that one of the sticking points in this deal has -- lately, that is -- has been instant messaging. Have you got anything to add to that?

DAVIS: We know that the commissioners were debating that very strongly. Instant messaging, of course, was something that they were going back and forth and back and forth on; and, indeed, that may be one of the conditions that the commissioners do set forth when they come forth with their deal here about 7:15 Eastern time. We just don't know at this point -- Stuart.

VARNEY: All right, Patty Davis in Washington, thank you.

To sum it up, the deal is apparently done; there are conditions to it. Those conditions will be detailed at 7:15 Eastern time in a news conference in Washington. We will be attending it, of course -- bring you all the details when they happen.

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